Health of Nations

March 19, 2007

How quickly times change. Just a few months ago, universal healthcare was a perfunctory item on the Democratic wish list, morewistful than realistic. But, thanks to John Edwards, ArnoldSchwarzenegger, and Wal-Mart-- yes, Wal-Mart--a debate overuniversal health care is suddenly underway. And, to the shock ofreformers, they find themselves mulling a previously unimaginablequestion: Can universal health care actually pass?

Unfortunately, this is where the discussion gets tricky. You canplausibly blame the failure of the last great reform effort,President Clinton's, on any number of factors. But a keyimpediment, in retrospect, was the widely held perception that thevery idea of universal coverage was something foreign and scary.It's "socialism," the critics warned--unaware that the presidentwho probably came closest to signing universal health carelegislation was that notorious left-wing symp, Richard Nixon. Alas,history neither deterred the right-wing message machine nor dentedthe public's wariness of big government. The critics prevailed,and, today, we're still stuck with a dysfunctional health caresystem.

This season's reformers have already cobbled together genuinelyinnovative proposals. Whether you're talking about Edwards's planfor an individual mandate or Senator Ron Wyden's idea of junkingthe employer-based health care system altogether, there are nowmore than a smattering of serious ideas on the table. But all thenovel policy in the world won't make universal coverage happen ifthe reformers can't shatter the old tropes that conservatives usedto destroy the Clinton plan--and will undoubtedly reapply in thenext battle. It's time to get rid of those. And the place to startis with taxes.

And, yes, there must be new taxes. In any decent universal healthcare system, public spending on health care will grow, as taxpayerspick up the cost of insuring the uninsured or--as in a single-payersystem--the cost of insuring every single American. This gives theopponents of universal coverage an opportunity to pounce. New taxesmean new financial hardship, they say. And, really, don't you payenough in taxes already?

But, if public spending on health care grows, then private spendingon health care should shrink. Today, the average family insurancepolicy costs a staggering $11,000 per year. One reason: Privateinsurance already subsidizes the cost of treating the uninsured,since doctors and hospitals charge paying patients extra to make upfor the money they lose on charity care. If government were tostart insuring the uninsured directly, then people wouldn't have topay quite so much for private coverage anymore. And, naturally, ifgovernment were to start insuring everybody, then people wouldn'thave to pay for private insurance at all.

In other words, raising taxes to finance universal health care isn'ttantamount to imposing a new financial burden. It's swapping oneburden for another. And there is good reason to believe that,ultimately, the new burden will be smaller. Serious reform schemeshave the potential to restrain costs substantially--whether byeliminating administrative waste, bargaining harder on prices, orreducing unproductive profiteering.

In one reform proposal, recently outlined in these pages by EzekielJ. Emanuel and Victor R. Fuchs, the government could finance auniversal voucher system with a value-added tax of 10 to 12 percent("Vouchsafe," February 19). Yet, even accounting for those higherprices that tax would impose at the checkout counter, Fuchs, who isamong the nation's most respected health care economists, predictedthat typical Americans would end up better off financially. Amongother things, he noted, wages would rise as employers stoppedcontributing toward employee benefits.

Calculations like these don't even begin to tally the added economicgrowth that reform might unleash. Among the many failures of ourhealth care system is that it discourages people from changing jobsor starting out on their own by creating a fear of switchingcoverage or losing coverage altogether. Universal health care wouldpotentially eliminate that damper on entrepreneurship. Indeed, thisis the lesson of Scandinavia, where the high taxes that financewelfare states haven't deterred growth--in part, according to theexperts, because a secure workforce is more willing to embrace adynamic, ever-changing economy.

And, if invoking the example of Sweden (or, as is the case, Denmark)sounds suspiciously socialist, then Americans can comfortthemselves with the fact that high taxes have been compatible withgrowth here, too. They need only harken back to the Clintonera--that is, before the Bush tax cuts slashed federal taxrates--when the economy enjoyed one of its strongest growth periodsever.

But it's not just financial benefits that universal health carewould bring. It's also peace of mind--the security that comes withknowing your health insurance can never be taken away, no matterwhat happens to your job or what medical catastrophe befalls you.If you don't think that's worth an awful lot, ask somebody who hashad to go without health insurance recently--a group that,according to some studies, accounts for nearly one-third of theentire U.S. population over the course of any two-year period.

Will Americans ever learn to live with higher taxes again? A fewprominent politicians seem to think so. Arnold Schwarzenegger hasjustified the new "fees" to pay for his proposed California healthplan by arguing that it's preferable to the "hidden tax" allresidents now pay to cover the cost of care for the uninsured. It'sa clever formulation that, appropriately, reminds voters of themoney they could end up saving under his plan. More courageous,still, is John Edwards. When he unveiled his universal coveragescheme earlier this year, he came right out and acknowledged hisplan to pay for it with taxes. The benefit more than outweighed thecost, he said without evasion, as if the concept wereselfevident--and firmly in the mainstream of U.S. politics. That'scertainly where it belongs.

The New New Republic

As you will have noticed by this point in the issue, we've done abit of tinkering with tnr. These changes began with a question:What is paper good for? Or, to put it another way, how does therush of new technology change the old ways of print publishing?Television, radio, and the Internet chew over Topic A at such aclip that any paper journal obviously faces a distinct comparativedisadvantage when it comes to discussing the tumult of the week.

But, for all technology's advances--and we will exploit them fullyat the soon-to-be-relaunched tnr online--we still believe, morethan ever, in fact, in journalism produced on dead trees. Yes, ittakes greater time and resources to put words on paper. But that,in turn, demands an investment in the craftsmanship of writing,reporting, and editing that can yield the defining, contextualpieces that we hope won't fade in relevance over a week, a month,or sometimes even years. So, as we increasingly have used ourwebsite to engage with the news cycle, we have found our printmagazine organically acquiring a new identity--an identity based onlonger, deeply reported profiles, essays, and investigative piecesthat intend to shape opinions and events as much as they respond tothem.

We began to take stock of this change and found ourselves asking: Ifwe were no longer writing and editing a weekly magazine, then whypublish a weekly magazine? With this issue, we've tried to embracethe logic of publishing in the Internet age. Our new, thickermagazine will appear twice a month, 24 times a year. We've improvedour design, creating a magazine aesthetically worthy of the contentwithin--better quality paper, original art, and photography. Thedesign harkens back to the magazine's earliest incarnations.Hopefully, you'll find that the words embody the classic tnrspirit, too.

More details about our changes can be found at www.tnr.com/change,or, if you prefer human interaction, you can call 1-800-827-1289.The Editors